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Saturday, November 10, 2007

Pakistan Analysis

Afghanistan. Hamid Karzai’s government in Kabul has consistently sparred with Musharraf’s Pakistan. The resurgent Taliban are primarily based in Afghanistan’s south among the Pashtun community. The Durand Line separating Pakistan and Afghanistan artificially divides Pashtuns who can be found on both sides of the border. The Taliban have been greatly assisted by these cross-border ties. Moreover, many American and Indians officials allege that the Pakistani government did not crack down on the Taliban as hard as it should have after the overthrow of the Taliban regime. There is powerful suspicion that Pakistan’s dominant security elites see the Taliban and Pashtun rebels as their key tool of influence within strategically crucial Afghanistan and thus have continued to at least tacitly support them.

Pakistan’s political situation holds two severe risks for Afghanistan’s current regime. The first is that the Taliban will continue to grow in strength. Taliban-linked elements have successfully imposed costs on Pakistani security forces and carved out territorial control in the hills and valleys of Federally Administered Tribal Areas and North-West Frontier Province. This provides a sanctuary to continue the fight against Afghan government forces, as well as U.S. and NATO forces. These counterinsurgent forces are already facing a severe challenge, and emboldened Islamist and Pashtun forces in Pakistan will not help matters.

Second, and at a more structural level, growing Pashtun assertion threatens Afghanistan’s territorial cohesion. Afghanistan is a multi-ethnic state, and its current rulers draw heavily from the country’s non-Pashtun north. There has been sentiment in the past for a “Pashtunistan” that would carve out a separate territory for Pashtuns out of Afghanistan and Pakistan. The precedents of East Pakistan and Balochistan suggest that action by a Punjabi-dominated Pakistani military can spur further separatism and regional resentment. If the Pakistani military’s offensives in the northwest heighten separatist tendencies, this is sure to influence at least some Afghan Pashtuns toward separatism.

India. Pakistan’s neighbor and arch-rival India is watching the current situation with growing alarm. The government’s subdued response to emergency rule suggests that it does not want to rock the boat one way or another. The costs of sustained tension with Pakistan are a huge external check on India’s continued rise, necessitating money and policy-makers’ attention that could be far better spent on other social, economic, and military priorities. The current crisis holds the potential to further inflame this relationship in three important ways.

First, a Pakistani state focused on fighting for domestic power may be less willing and able to control the many militant organizations that have targeted India from Pakistani bases. Organizations like Lashkar-e-Toiba and Jaish-e-Mohammed have launched dramatic terrorist attacks throughout India in recent years, while also operating in Indian-administered Kashmir. A further fracturing of the monopoly of state power may unleash a wave of violence against India. Indian economic growth hinges on relative domestic stability, which would be badly undermined by an upsurge of terrorism in key urban centers.

Second, there is always the possibility that the beleaguered Pakistani regime may try to mobilize support at home by raising tensions with India. In the current context this is unlikely, as the Pakistani military is in no position to credibly play a game of brinkmanship with an increasingly-powerful India, but the future contingency remains. An extraordinarily deep distrust of Pakistan is embedded in the worldviews of many Indian security elites, and so all Pakistani moves will be viewed with profound suspicion.

Finally, the worst-case scenario of a collapsing Pakistan would pose enormous challenges to India. The most direct result would be a massive wave of refugees, like the deluge that streamed out of East Pakistan (now Bangladesh) during Pakistani counter-insurgency operations in 1971. This social and logistical burden would be joined by uncertainty over the control of Pakistan’s nuclear weapons and the political future of Pakistan’s provinces and power centers. Far more would have to happen before this disastrous situation arises, but it is being openly discussed in Delhi.

The November 3rd imposition of emergency rule and the suspension of the 1973 Constitution in Pakistan is one of the most significant events to occur in South Asia since the launch of this blog. While much is being (and will be) written about the politics of the situation, any analysis of the implications of this event for poverty reduction (the objective of this blog) will have to consider the following facts. Since 1999, the Pakistan government has undertaken a series of macroeconomic and structural reforms and Pakistan's GDP growth rate has accelerated. It has been averaging well over 7 percent a year over the last three years. Poverty has been declining steadily at about one percentage point a year during this period. Despite rising world oil prices, inflation has largely been kept under control. Nevertheless, there are two sources of concern on the macroeconomic front. The current account has gone from a surplus of one percent of GDP four years ago to a deficit of 4.9 percent of GDP today. And export growth has declined sharply from 14 percent a year two years ago to 3 percent this year.

A case in point was the high drama yesterday, when twice-removed prime minister Benazir Bhutto declared she would lead a rally of her Pakistan People's Party against General Pervez Musharraf's state of emergency. The world saw soldiers preventing the march by surrounding her house with barbed wire and rounding up her party's activists. The effect was to make Bhutto look like a brave leader of the opposition to military dictatorship.

The reality is less clear-cut.

The parties involved have spoken openly about American sponsorship of a political deal between Musharraf and Bhutto. A complicating factor in their negotiations is that neither one wants to appear to be the pawn or the favorite of Washington.

Consequently, the two sides are fulfilling elements of the deal while insisting they have not been able to come to terms with each other. Musharraf, after all, had corruption charges dropped against Bhutto, enabling her to return from exile. In return, legislators from her Pakistan People's Party allowed Musharraf to be reelected president last month by the outgoing Parliament, despite a constitutional prohibition against one person simultaneously holding the positions of army chief and president.

The elegance of their unacknowledged understanding is that each still holds a card of great value to the other. Musharraf needs Parliament to accept the legitimacy of his election by the previous federal and provincial assemblies. This is a favor Bhutto may eventually be able and willing to grant. And for Bhutto ever to regain the office she covets, Musharraf will have to undo the constitutional ban prohibiting anyone from serving more than two terms.

The fact that Bhutto was allowed to speak on government television yesterday, denying that she has been talking directly to Musharraf and demanding that he end the state of emergency, suggests that the two sides are continuing to coordinate their actions. She is leaving the door open for Musharraf to remain in power; he is protecting her from suicidal assassins while giving her a platform to appear the people's democratic champion.

This is a political shadow play. Many Pakistanis know that Bhutto's family and entourage presided over egregiously corrupt and incompetent governments, and that Musharraf's military cronies have been placed in key business sinecures from which they control a large swath of Pakistan's economy.

Amid all this intrigue, the current prime minister, the apolitical former Citibank executive Shaukat Aziz, has fostered stunning economic growth in the last few years, without the corruption of his predecessors. His stewardship comes much closer to the ideals of competence, transparency, and accountability than to Bhutto's penchant for feudal privilege or Musharraf's for Napoleonic authoritarianism. Whatever the outcome of the Bhutto-Musharraf shadow play, Pakistan needs the kind of good governance it has had from Aziz

Some analysts believe that the blueprint of attack was reactivated when Pervez Musharraf was appointed chief of army staff in October 1998. In a disclosure made by Nawaz Sharif, the then Prime Minister of Pakistan, he states that he was unaware of the preparation of the intrusion, and it was an urgent phone call from Atal Bihari Vajpayee, his counterpart in India, that informed him about the situation. Responding to this, Musharraf asserted that the Prime Minister had been briefed on the Kargil operation 15 days ahead of Vajpayee's journey to Lahore on February 20. Sharif had attributed the plan to Musharraf and "just two or three of his cronies",a view shared by some Pakistani writers who have stated that, only four generals, including Musharraf, knew of the plan.